CREATING A COOPERATIVE

Step 1: The vision or idea
The first step in creating a new cooperative is an idea that a specific need could be met or better met by working together. Examples of this would be ideas where significant advantage could be gained by group purchasing, marketing, and production or processing.

Step 2: Garnering support
The second step is to communicate the idea or vision to individuals who may have an interest or be in a position to gain an advantage. This generally begins with one on one or informal small group (i.e. coffee shop) sessions that result in a meeting or series of small meetings.

Step 3: Building the basics
The group or selected leaders of the group begin to investigate cooperative options and communicate with other cooperatives or cooperative organizations. The principle of co-operation among cooperatives also extends to potential cooperatives. The group or selected group members begin to articulate the vision that outlines the benefits and provides some basic preliminary projections.

Step 4: Determining the requirements
With assistance from cooperatives, cooperative trade associations and/or government officials, the group needs to determine the legal and other organizational components required to form the new cooperative. The group also needs to generate a basic overview of the membership and capital investments required to make the organization viable. In some cases the group may proceed to a formal feasibility study at this stage, but most often the group will require some funds to migrate to that stage. Often a brief business outline is sufficient at this stage.

Step 5: Communication
The group is now in a position to present the vision and business outline to the intended member group for feedback and support. Most often attendees are asked to express interest formally or informally by providing some financial contribution to move the process forward.
Assuming that there is sufficient support, the group can move forward with a feasibility study, draft By-laws. These requirements will vary depending on the size, type and purpose of the cooperative.

Step 6: Preparation
Whether a feasibility study is prepared early or late, it is important to have and communicate available information to ensure that members (who are also the potential investors) are not investing blindly. Most potential cooperatives require assistance in the development of a feasibility study. It is also likely that the group will need legal assistance for such items as Bylaws and Articles of Incorporation. The resulting information must be clear on financial contributions, risks and obligations being requested of potential members.

Step 7: Initial Meeting
The plans, the benefits and the financial requirements are communicated at an open or targeted public meeting called specifically for that purpose. Attendees are asked to join the cooperative, Bylaws approved and the Board of Directors elected. By-laws can only be put in place after incorporation by a vote of members. Once in place, the cooperative can begin to build the enterprise.